MRO is Maintenance, Repair and Operations items, which includes Supplies consumed in the production process but do not either become part of the end product or are not central to the firm’s output. These include consumables (such as cleaning, laboratory, or office supplies), industrial equipment (such as compressors, pumps, valves) and plant upkeep supplies (such as gaskets, lubricants, repair tools), and computers, fixtures, furniture, etc.
MRO expenditures in any organisation typically vary in the range of 5-10% of cost of goods sold (COGS). This is minor portion of expenditure in comparison to major spends like Raw Materials, Capital expenditure etc., hence often it doesn’t get a lot of attention, but when MRO is not managed properly it can also stop our production line immediately.
So not managing MRO properly could lead us to miss customer deliveries, lose revenue and incur lack of performance penalties, and we will lose money and bleed cash.
So, MRO is critically important!
MRO in maintenance items category is broadly classified in three groups. For preventive maintenance, for corrective maintenance and for predictive maintenance.